iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,892 Blog Posts

Are Markets Pricing In a Trump-Induced September Rate Hike?

On Monday republican presidential candidate Donald Trump fired political shots at the Federal Reserve saying, “she is keeping them artificially low to get Obama retired,” while referring to the interest rate policy the Fed has taken under the leadership of Janet Yellen.

The Federal Reserve is set to release their September rate decision this upcoming Wednesday.  If Yellen is indeed political,  and the businessman’s statements perturbed her, she may use the meeting as an opportunity to prove him wrong.

Unexpectedly lift rates by 25 basis points and press the markets to new highs.

Investors are currently pricing in a 15% chance of a rate hike.

“I think she’s very political, and to a certain extent she should be ashamed of herself.” – D.Trump

A strong stock market bodes well for President Obama and also Hillary Clinton, who is set to debate Trump Monday September 26th, five days after the FOMC rate decision.

There’s an old saying among investors and traders about not fighting The Fed.  Trump picked a fight with the central bank in public forum, and Yellen and her team of bankers have two meetings left to react before elections.

The S&P 500 is down -1.5% since Monday’s close.  The selling could be associated with Trumps remarks, Clinton’s rash of health incidents, or just old fashioned OPEX shenanigans.

If the Fed does take action next week, many will speculate whether their timing was political.  Americans’ trust in many of the long-standing pillars of society is sinking to new lows.  According to a recent Gallup Poll, only 32% said they trust mass media “to report the news fully, accurately, and fairly”.  No poll numbers currently exist based off a similar question of trust in the Federal Reserve.

Donald Trump continues to be a constant presence in the media by saying stunning things.  His latest comments toward the Fed may lead investors to start pricing in rate hikes, and soon.

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Top Executives At Wells Fargo Reveal A Toxic Work Environment While Defending Their Bank

John Shrewsberry, CFO of Wells Fargo, spoke among fellow bankers Tuesday in New York and assured everyone the big bank can continue dominating our society without the aggressive sales tactics that encouraged their employees to commit wholesale fraud.

Bloomberg has some direct quotes from Mr. Shrewsberry:

“I think we can make this pivot in a way that protects our business model.”

“These bad practices were not a revenue-generating activity, it was really more at the lower end of the performance scale where people apparently were making bad choices to hang on to their job,”

The leaders at Wells Fargo are being huge dicks to their underlings, and their public behavior reveals how sad life can be for workers at the bottom of the corporate world.

John Stumpf, the CEO of Wells Fargo, was also blaming ‘the lower end of the performance scale’ Tuesday while speaking to The Wall Street Journal.

As public and congressional pressure mounted on Wells Fargo & Co. executives, its top two bankers had an explanation Tuesday for allegedly illegal sales practices across the company: It was employees’ fault.

Chief Executive John Stumpf defended the firm and the efforts it had taken to stop the behavior, which included opening accounts for customers without permission. “There was no incentive to do bad things,” Mr. Stumpf said in an interview with The Wall Street Journal. He called the conduct that led to last week’s settlement with federal and local authorities “not acceptable,” adding that the bank doesn’t “want one dime of income that’s not earned properly.”

The company fired 5,300 employees, mostly managers, it said were involved in the sales practices described by the settlement—the settlement which to some resembles a paltry fine:

Meanwhile Carrie Tolstedt, the head of the group that was exposed for creating some 2 million fake credit cards and bank accounts designed to churn out late fees, quietly left the bank Tuesday morning.  She walked away from the growing firestorm with a nice $125 million package.  A sad corporate day indeed, unless you’re at the top.

Blame the minions and eliminate them

Wells Fargo sent the cavalry out Tuesday to defend their company, hoping to quell the outcry before it grows into something worse.  After all, Wall Street’s initial reaction to the settlement was mild:

And perhaps everyone would have glazed over if the top executives of the banking firm weren’t throwing their low-level employees under the bus.  But now the story is how these banksters are attempting to control the damage, and as Jim Cramer tweeted Thursday morning, Wells Fargo’s problem is not going away any time soon:

It might even get worse, mostly for investors and lower management.  As for the egomaniacs at the top, they’re confident the company can just ‘pivot’ (corporate speak) and keep their status as one of the top banking overlords of the world.  Although not the top USA bank anymore.  They lost that position, on a market cap basis, after their little hiccup:

thomps-reuter

Toxic work environments kill attrition.  They also kill the incentive to work hard and benefit the corporate organization.  The whole thing stinks.

Wells Fargo stock (ticker: $WFC) is down -10% year-to-date.

Reader’s Bonus – below is the entire WSJ article, in case you’re unable to scale (or tunnel beneath) their paywall. FREEDOM!

Wells Fargo CEO Defends Bank Culture, Lays Blame With Bad Employees

Says that at the bank, ‘There was no incentive to do bad things’

As public and congressional pressure mounted on Wells Fargo & Co. executives, its top two bankers had an explanation Tuesday for allegedly illegal sales practices across the company: It was employees’ fault.

Chief Executive John Stumpf defended the firm and the efforts it had taken to stop the behavior, which included opening accounts for customers without permission. “There was no incentive to do bad things,” Mr. Stumpf said in an interview with The Wall Street Journal. He called the conduct that led to last week’s settlement with federal and local authorities “not acceptable,” adding that the bank doesn’t “want one dime of income that’s not earned properly.”

At the same time, the San Francisco bank said it would soon eliminate the practices at the center of the controversy: branch-level sales goals that encouraged employees to cross-sell products to customers. Last week, Wells Fargo paid a $185 million fine to regulators, including the U.S. Consumer Financial Protection Bureau, after findings that many accounts were falsified or forced on unsuspecting customers.
Many of the employees felt pressure to sell customers multiple products or services—for example, home-equity lines to certificate of deposit holders—to stay in their jobs or earn bonuses tied to sales goals, according to interviews with current and former Wells Fargo workers. Some branch employees met with their managers several times a day to report their progress on meeting cross-selling targets, they added.

On Monday afternoon, Wells Fargo was the country’s largest bank by market capitalization. But by Monday evening, word came of planned congressional hearings. By the end of the day Tuesday, a 3.3% stock decline meant that Wells Fargo, with a market capitalization of $236.9 billion, was now second in value to J.P. Morgan Chase & Co., with $240.3 billion. Wells Fargo had surpassed J.P. Morgan in 2013.
“They’ve been perceived to be the highly credible, high- quality institution,” said John Pancari, a bank analyst at Evercore ISI. “This is a chink in the armor.”

The fine itself is tiny for a bank Wells Fargo’s size. It represents only about 3% of the bank’s second-quarter profits. But analysts are now concerned that the bank’s customers will grow more suspicious of Wells Fargo’s motives and eventually move some of their deposits and lending business to rivals.

On Friday, one analyst, Richard Bove of Rafferty Capital Markets, downgraded Wells Fargo shares to “sell” from “hold,” dropping his target price on the stock to $44 from $51. The shares closed Tuesday at $46.96.
Mr. Stumpf, who is slated to be questioned by the Senate Banking Committee next Tuesday, initially wouldn’t comment on who was ultimately responsible for the practices and sales-driven culture that led employees to move customers’ money into new accounts without their knowledge, in some cases generating fees for the bank.

He later said through a spokeswoman that when the bank falls short “I feel accountable and our leadership team feels accountable—and we want all our stakeholders to know that.”

Rather, Mr. Stumpf said that some employees didn’t honor the bank’s culture. “I wish it would be zero, but if they’re not going to do the thing that we ask them to do—put customers first, honor our vision and values—I don’t want them here,” he said. “I really don’t.”

ENLARGE
The 5,300 employees who were fired over five years due to improper selling, Mr. Stumpf said, included bankers, managers and bosses of those managers. Chief Financial Officer John Shrewsberry said about 10% of the employees let go were branch managers or higher.

Mr. Shrewsberry said the bank’s issues stemmed from “people trying to meet minimum goals to hang onto their job.”

Much of the activity occurred in Wells Fargo’s large community-banking division. That unit generated $12 billion in revenue in the second quarter and accounted for 57% of the overall bank’s net income during the quarter. On Tuesday, Mr. Shrewsberry said the bank is spending $50 million annually on addressing these issues.

“Cross-selling has been a religion there,” said David Hendler, founder and principal of bank research firm Viola Risk Advisors, LLC. “They can’t say we’re not going to do that and not have another idea to roll out in the meantime,” Mr. Hendler said.

Wells Fargo has sought to put the 5,300 figure in the context of its overall workforce of nearly 270,000 staff. But Mr. Stumpf acknowledged Tuesday that the number of dismissed employees was far higher than he wanted.

“The 1% that did it wrong, who we fired, terminated, in no way reflects our culture nor reflects the great work the other vast majority of the people do,” he said. “That’s a false narrative.”

Some employees who recently left were critical of the executives’ message. Mita Bhowmick, a former Wells Fargo teller in Pennsylvania, said of responsibility for the sales tactics, “It was all management: their boss, then their boss, then their boss.” Ms. Bhowmick took early retirement from the bank in 2014 at age 58. “They are putting pressure on employees, and it’s sad,” Ms. Bhowmick added. “People need their jobs.”

A public and political uproar followed the allegations that Wells Fargo employees had opened as many as two million accounts without customers’ knowledge and sometimes created fake email addresses on phantom applications.

Staffers at Wells Fargo allegedly created fake email addresses, such as “noname@wellsfargo.com,” to enroll unknowing consumers or people who don’t exist in online-banking services to hit sales goals, said the Los Angeles City Attorney’s office, which had previously sued Wells Fargo over sales practices.

The bank’s settlements prompted the Senate Banking Committee to call a hearing to look into the bank, saying it would invite Mr. Stumpf to testify. Mr. Stumpf said Tuesday that he is prepared to attend and “share Wells Fargo’s story.”

When asked if he was worried about his own position, Mr. Stumpf said his whole focus is on leading the bank. “I’m thinking about how do we move forward,” he said.

Wells Fargo executives said the bank still wants to grow sales, but decided it would no longer set targets. “We think to the extent that some team members used a sales goal as a motivation to do something that is inconsistent with our culture… [it’s] just not worth it,” Mr. Stumpf said.

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Volume Disappears; NASDAQ Back To Normal

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight but was contained inside Tuesday’s range.  At 7am MBA Mortgage Applications came in better than last week.

Also on the economic calendar today we have crude oil inventory at 10:30am.

Yesterday we printed a normal variation down.  Price opened gap down and pushed lower for most of the morning.  By lunchtime a strong responsive bid was found, right at the Monday midpoint, then two way trade ensued.

Heading into today my primary expectation is for sellers to work into the low-volume overnight inventory and close the gap down to 4724 and continue lower to take out overnight low 4719.25.  Price is choppy today but bulls defend ahead of Tuesday’s session low 4695.75 as two-way trade ensues.  Theta burn, for the call option holders.

Hypo 2 buyers take out overnight high 4740.75 and continue working higher to close Monday’s gap at 4762.  Responsive sellers show up here and two way trade ensues.

Hypo 3 the longer term up trend reasserts itself.  Strong buyers take out overnight high 4740.75, close the gap up to 4762 then sustain trade above 4764.75 setting up a move to target the open gap up at 4792.25.

Levels:

09142016_nq_mp

Volume profiles, gaps, and measured moves:

09142016_nq_vpgapsmeasuredmoves

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NASDAQ Futures Abnormally Active Ahead of Tuesday

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring abnormal (2nd sigma) range and volume.  Price worked lower overnight and erased the afternoon portion of yesterday’s trend day.  Price also formed a weak low.

On the economic calendar today we have 4- and 52-week T-bills up for auction at 11:30am, a 30-year bond auction at 1pm, and the Monthly Budget Statement at 2pm.

Yesterday we printed a trend up.  Price opened gap down to start the week, right on the MCVPOC from July at 4653.25.  Buyers bought the dip and became initiative well before lunch.  They continued initiating new risk for the resk of the session, ending the day up near the open print from last Friday’s trend down, effectively erasing Friday’s price action.

*Note – Friday was the 3rd biggest daily decline in the last 10 years.

Heading into today my primary expectation is for a push down through overnight low 4727.75 which opens the door for a test of 4702.25 before two way trade ensues.

Hypo 2 buyers press into overnight inventory, up to 4748 before finding responsive sellers who work back down to overnight low 4727.75.  Look for buyers around 4713.75 and two way trade to ensue.

Hypo 3 buyers press up through all the overnight inventory to close the gap up to 4762 then set their sights on overnight high 4767.50.  This sets up a continued move higher to 4792.25 before two way trade ensues.

Hypo 4 hard liquidation.  Sellers sustain trade below 4700 setting up a move to test down to 4640.75 before two way trade ensues.

Levels:

09132016_biasbook

Volume profiles, gaps, and measured moves:

09132016_nq_vpgapsmeasuredmoves

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Exclusive: Facebook Security Blocks Hillary Clinton Pneumonia Article

Facebook algorithms are blocking my attempt to share this iBankCoin.com post about Hillary Clinton’s contagious case of pneumonia.

The article was quickly identified and blocked by the social media company’s security systems:

clinton-fb-blocked

Perhaps it was my added commentary, in particular the use of ‘greasy politician’ that caused the Facebook brown shirts to stifle my voice.  So I toned it down and tried again…

toned-down-hill-penum

No luck. Therefore the message ‘that has been blocked’ must be contained somewhere inside the actual post, which is 100 words on Hillary Clinton’s pneumonia finished off with questioning the presidential candidate’s decision to lay hands on a young girl while potentially being at risk of spreading infection.

Nothing is malicious, threatening, or perverted about it.

What is perverted is the ability of these huge organizations to control the conversation and narrative of a Presidential election.  As Facebook spreads their tentacles across the globe they will increasingly be able to control the message, and perhaps the outcome, of elections around the world.

Some would view a corporation’s ability to affect the outcome of an election as a threat to democracy.

This event will come as no surprise to most.  Just last week Norway’s largest news paper called Facebook out for blocking their use of a Pulitzer Prize winning photograph in their story.  The tyrants at Facebook were eventually forced to eat crow and permit the content after the Norwegian paper called out Mark Zuckerberg’s bullshit.

Earlier this summer, a former Facebook news curator spoke on the liberal bias of the company and how the website’s algorithms are designed to promote their narrative.

Bottom line – any business reliant upon Facebook to drive traffic to their website could whither and die if the social media giant does not agree with the tone and approach being taken.

They are censoring iBankCoin.com, but we are a lean and diversified organization who will not bow to the capricious whims of a hipster social media website.  In 10,000 years our words will continue to resonate through the interwebs of earth and beyond.

If your company is not able to survive a siege by Facebook, consider this a warning to diversify your business, else feel the sting of hunger as your cash flows become a trickle at the hands of a Facebook blockade.

 

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NASDAQ Starts The Week Lower; Here’s What You Need To Know

NASDAQ futures are coming into option expiration week gap down after an overnight session featuring extreme volume on an elevated range.  Price worked lower Sunday night, working into the 07/20 range and below this week’s ATR band before finding a strong responsive bid.  Since then the market has rallied about 30 points.

There are several Federal Reserve members speaking today, but everyone seems most concerned about Brainard talking economic outlook in Chicago at 1:15pm.  Also on the docket today we have several bond auctions; at 11:30am both 3- and 6-month T-bills will be auctions, and the 3- and 10-year Note auctions are set for 1pm.

Last week was a holiday shortened week.  On Monday the markets were closed in observation of Labor Day.  The week began with a day-and-a-half of buying followed by a reversal just after making new highs.  Thursday saw a gap down that never filled.  Then Friday a gap down morphed into a trend day down.

Here’s the performance of each major index last week:

09112016_indexperf

Heading into today my primary expectation is for buyers to push into the overnight inventory and attempt to reclaim Friday’s range.  Look for sellers around 4685 who push the market down and out of Friday’s range, back down to the MCVPOC around 4653.25 before two way trade ensues.

Hypo 2 buyers reclaim Friday’s range and sustain trade above 4685 setting up a move to target 4708.50 before two way trade ensues.

Hypo 3 sellers push hard off the open and work back down to overnight low 4625.25 and continue lower to target the open gap down at 4605.

Levels:

09122016_nq_mp

Volume profiles, gaps, and measured moves:

09122016_nq_vpgapsmeasuredmoves

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Deplorable Stock Market Behavior Earns Lowest Model Score Ever

The central banks normally condemn the downward spiral-type trading that occurred last Friday.   For some unknown reason, the markets were permitted to explore lower prices, and while doing so they revealed a severe lack of demand for equities.

In one trading session, sellers effectively moved the markets away from a two-month price range.  Now the broad indices are trading at levels unseen since early July.

The price and volume behavior ranked worse that anything the auction theory model inside Exodus has ever seen.  These extreme readings often tell a story of opportunity.

I just published the 96th Edition of Exodus Strategy Session, and inside it we discuss two potential trading scenarios for next week.  Members, go check it out!

As for the rest of you.  Buckle up.  The model is calling for speed.

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How About That Massive NYSE TICK This Morning?

When the markets opened Friday morning the New York Stock Exchange was slammed pummeled with down ticks, likely via the ‘market on open’ sale orders lining the queue.

It was an extreme event, 3rd sigma.  We’ve covered these many times, you can go with them intra-day, check this freak-beast TICK out:

hugedowntick-09082016

A TICK this low occurs 0.03% of the time according to a RAUL SANTOS 5 year study of the instrument, using high-quality raw data from IQFeed.

So when it happens there is work to be done.

Most of you would rather read low-brow political guff, but these are the tools I use to make money.

Carry on.

Hardcore traders: I categorize posts like this under ‘tools I use’ so you can look below at ‘Related Articles’ to read more about the phenomenon.

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Big Money Activates Hard Down Move on Tricky Roll Forward Day

Institutions know most traders get discombobulated on the Friday before a quarterly option/future expiration and it tends to be a day wrought by heavy moves in price.

If the rally has been strong, a hard flush to blow out the directional call buyers.  Conversely a down tape often experiences a rapid squeeze higher.

This is OPEX trickery at its best, and heading into Q4 big players are making a definative move down and away from the value we spent most of August building.  Below you can see the value as printed on the NASDAQ:

failed-auction-09012016

The market tried twice to break the balance to the upside, to no avail.  Now we are exploring lower prices aggressively.

For the last month, several metrics inside the tape have rhymed with November 2015.  Panning out and observing the behavior, there are similarities and differences, but if we are embarking on another January 2016-type move, things could get ugly fast.  Here’s the analog to work with:

analouge-09012016

On my end, I blew out several longer-term stock holdings after the first failed auction and I’ve been sitting like an old man, yelling at all the momentum traders.  So I don’t have much else to do aside from waiting for my algos to nudge me back in.

In the futures, life is finally coming back, opportunity has reemerged on the tape (it always does, patience was wearing thin though).

This move is very much risk off and cautionary, with an active higher time frame who knows most investors/traders came into the day ill-prepared.  Caution.

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Wells Fargo Commits Massive Banking Fraud; Receives Small Punishment

Bankers gonna bank.  According to the Clinton News Network, over 5000 Wells Fargo employees have been fired after being linked to the secret creation of unauthorized credit cards and fee-carrying accounts:

On Thursday, federal regulators said Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — since 2011.

The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

Wells Fargo was also fined $185 million, but is otherwise permitted to continue their bankster ways.  Shares of the company have so far been unaffected by the ruling.  The bandits run free at WFC.

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